In AIC Ltd v Federal Airports Authority of Nigeria  UKSC 16 the Supreme Court has re-stated the principles to be applied when a judge is asked to revisit a judgment or final order before it has been sealed by the Court, where there has been a change in relevant circumstances in the meantime.
As the Supreme Court noted, this issue can arise at all levels of civil litigation, from interim or case management orders to final orders made at the end of a trial. The Supreme Court held that the fundamental principle of finality in English litigation weighs heavily against the re-opening of final orders by the Court; however, factors may exist in individual cases sufficient to outweigh this fundamental principle, justifying the Court, in its inherent jurisdiction, re-opening a final order.
AIC concerned an application to enforce a Nigerian arbitration award under the New York Convention. Under the award issued in June 2010, the Federal Airports Authority of Nigeria ("FAAN") was ordered to make a payment of US$48.13 million (plus interest) to AIC ("Award"). FAAN challenged the Award in the Nigerian courts in June 2013, prompting a number of appeals and cross-appeals by the parties, ultimately resulting in the Supreme Court of Nigeria, in January 2022, remitting FAAN's challenge back to the Nigerian High Court for consideration.
In the meantime, in January 2019, AIC issued proceedings in England to enforce the Award against FAAN. An order permitting enforcement was granted in February 2019 ("February Order"). FAAN applied for the enforcement to be adjourned since its challenge to the Award was still pending in the Nigerian courts. AIC cross-applied, asking that any adjournment should be on condition that FAAN provided security.
In August 2019, the High Court set aside the February Order. It adjourned enforcement of the Award pending the outcome of the Nigerian proceedings on condition that FAAN provided security of just over US$24 million. FAAN unsuccessfully tried to appeal that order. In the meantime, the High Court ordered FAAN to provide the security in the form of a bank guarantee by 5 December 2019. At a short hearing on 6 December 2019, as FAAN had not provided a bank guarantee, the High Court gave AIC permission to enforce the Award against FAAN ("6 December Order").
Later that day, after the Court hearing, a guarantee issued by Standard Chartered Bank ("SCB") in favour of FAAN was emailed to AIC by FAAN. FAAN advised AIC that as the security which it had previously been ordered to provide by the Court had now been provided, it intended to ask the Judge to re-open the 6 December Order whereupon the Judge directed that the 6 December Order should not be sealed in the meantime.
At a further hearing on 13 December 2019, the Judge set aside the 6 December Order, extended time for provision of the guarantee until 9 December 2019, and adjourned AIC's application to enforce the Award pending the outcome of the Nigerian proceedings. AIC appealed, seeking reinstatement of the 6 December Order.
The Court of Appeal allowed AIC's appeal, and reinstated the 6 December Order, enabling AIC to enforce and receive payment under the bank guarantee of US$24 million. Enforcement of the balance of the Award was stayed pending FAAN's appeal to the Supreme Court.
The questions for consideration by the Supreme Court were the process, and principles to be applied by a Judge when faced with a request from a party to reconsider an order or judgment.
Under the Court's inherent powers, a Judge has the power to re-open a judgment or order at any time until the order has been sealed by the Court. When the issue was last considered by the Supreme Court in 2013, in the context of family proceedings, Baroness Hale said that this power should be exercised by doing justice in accordance with the overriding objective which in that case involved having regard to any welfare issues involved. Here, the Supreme Court noted, the situation was different as AIC concerned a commercial dispute, governed by the Civil Procedure Rules ("CPR"). The overriding objective of the CPR is to enable "the court to deal with cases justly and at proportionate cost". This includes "enforcing compliance with rules, practice directions and orders".
In considering how to apply the overriding objective under the CPR in AIC, the Judge at first instance had viewed it as a question of balance. The Court of Appeal said this was wrong and that a two-stage analysis should be applied instead: (i) is it right in principle to entertain the application to re-consider at all, and if so, (ii) should the application be granted on the merits. The Supreme Court considered that the Judge and the Court of Appeal were both partly right.
The Supreme Court said that the key starting point is the strong public interest in having finality in litigation, a long-standing principle in the English Courts. This principle had been recognised by Baroness Hale in Re L. However, in that case, the desire to have finality had needed to be balanced against the welfare issues involved. Here, where the Court was dealing with a final order in a commercial dispute, different considerations applied. Enforcing compliance with the Court's rules as part of the CPR's overriding objective affirmed and reinforced the principle of finality. The Court observed that litigation cannot be conducted at proportionate cost, with expedition, incurring an appropriate share of the Court's resources and with due regard to the rules of procedure unless it is undertaken on the basis that a party brings their whole and best case to a hearing when a matter is to be finally decided.